The 29-year-old, who joined the Minstermen in 2011, is out of contract at Bootham Crescent and will now look for a new club.
Walker scored 18 goals last season as York returned to the Football League and added a further nine this year as they secured final-day survival with a 1-0 win at Dagenham.
The striker leaves the club with a heavy heart but is relishing a new challenge.
"I've needed a change of scenery for a while now," he said. "I enjoyed my time at the club but I've known for the past few months I'd be moving on. I was not offered a new deal as such, but I think it was down to finances.
"I'm obviously pleased we stayed in the division and wish the club all the best for the future."
Walker, who was signed by Gary Mills, was impressed by the job Nigel Worthington did, but feels he did not fit into his style of play.
"Nigel Worthington obviously had a positive effect on the lads and came in with his own ideas and organised us slightly differently," he added. "But Gary Mills had a good style too, it was a sad time when he left especially bearing in mind what he did during his time at the club.
"It's been on the cards for a while and to be honest, I'm not sure that my game fits in with they way Nigel Worthington is looking to play. But I'm sure they'll do well and I'll be looking out for all their results with interest."
Meanwhile Press Association Sport understands that Blair has been released.